Maurice Quinlivan (Limerick City, Sinn Fein)
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Today we will have a discussion on sub-minimum rates of the national minimum wage. The National Minimum Wage Act allows for lower or sub-minimum rates for those aged under 20. The minimum wage for those aged 19 is 90% of the prevailing rate, for those aged 18, it is 80% and for those aged 17 and under it is 70%. This committee is currently carrying out detailed scrutiny of the National Minimum Wage (Equal Pay for Young Workers) Bill 2022, which if enacted will provide for the removal of these sub-minimum wage rates. The committee is pleased to have the opportunity to consider these matters further with representatives from the Mandate trade union, the Irish Small and Medium Enterprise Association, ISME, and the Economic and Social Research Institute, ESRI. I am pleased to welcome from Mandate, Mr. Greg Caffrey, divisional organiser, and Mr. Andrew Mannion, member; from ISME, Mr. Neil McDonnell, chief executive, and Ms Jean McCabe, chief executive officer Retail Excellence Ireland; and from the ESRI, Dr. Paul Redmond, senior research officer.

Before we start I will, as always, read a note on and explain some limitations to parliamentary privilege and the practice of the Houses as regards references witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected pursuant to both the Constitution and statute by absolute privilege. Witnesses are again reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name, or in such a way as to make him, her or it identifiable, or otherwise engage in speech that may be regarded as damaging to the good name of the person or entity. If statements are therefore potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.

The opening statements have been circulated to the members, and to commence our consideration of this matter I invite Mr. Caffrey to make opening remarks on behalf of Mandate.

Mr. Greg Caffrey:

I thank the Chair and the members of the committee for the invitation to attend today's meeting on the sub-minimum rates of pay and the National Minimum Wage (Equal Pay for Young Workers) Bill. The equal pay for young workers Bill is a necessary amendment to the national minimum wage legislation. The National Minimum Wage Act provides for and facilitates age discrimination for young workers by paying workers who are 19 years of age €11.43 per hour, workers who are 18 years of age €10.16 per hour and workers under 18 years of age €8.89 per hour.

As we all know, discrimination is illegal in Ireland as proscribed under the Employment Equality Act. Discrimination based upon a person's age is one of the categories within the Act which deems it illegal. Although the Employment Equality Act provides protections for the citizens of Ireland, it alarmingly contains a provision which permits age discrimination to be facilitated through the National Minimum Wage Act by allowing it to prescribe sub-minimum rates of pay for young workers solely based on their age. This is a contradiction of the Employment Equality Act, which states discrimination based upon a person’s age is illegal. The application and implementation of sub-minimum wage rates provide for our young workers to be discriminated against and exploited by employers who apply sub-minima wage.

The equal pay for young workers Bill before the committee today was composed by a young worker who, like many others, had been subjected to sub-minimum wage rates by her employer, when her comparable employees were in receipt of the national minimum wage of €12.70 per hour. The equal pay for young workers Bill calls for the National Minimum Wage Act to be amended. Section 14 of the principal Act is to be amended by the substitution of the following for section 14: "Subject to sections 17 and 18, an employee shall be remunerated by his or her employer in respect of [an] employee’s working hours in any pay reference period, at an hourly rate ... that on average is not less than the national minimum hourly rate of pay." The principal Act is also amended by the deletion of section 15.

The ERSI has reported through the Low Pay Commission’s sub-minimum age report 2024 that there are approximately 15,000 young workers recorded on sub-minimum wages in Ireland. The Low Pay Commission report details that Ireland is an outlier in the European Union in the application of sub-minimum wage, and the abolishment of sub-minima rates across the European Union has not had an adverse effect on business, nor has it had an adverse effect on early school leavers. The Low Pay Commission conducted an extensive and detailed report on the sub-minimum wage published in 2024, and the Low Pay Commission’s report recommendations are concise and transparent, which are to have the sub-minimum rates abolished by 1 January 2025 for all workers below 20 years of age.

The Low Pay Commission has also recommended, following the abolition of sub-minimum wage rates, a review on the abolition of sub-minimum rates after two years and at four years of its implementation. The purpose of the review is to examine and quantify any adverse effects the abolition of sub-minimum rates may or may not have.

The National Minimum Wage (Equal Pay for Young Workers) Bill 2022 was deferred for one year in 2023 by the then Minister for Enterprise, Trade, and Employment. The Minister had referred the Bill to the Low Pay Commission in 2023 to examine and compile a report on the sub-minimum wage.

Irish society, in general terms, promotes the concept of young people entering the workforce, contributing to society, gaining their own independence and learning to support themselves. However, a significant contributing factor of discouragement is that when a young person enters the workforce, they are not treated as equal to their co-workers who are in receipt of the national minimum wage. If sub-minimum rates are abolished, young workers would have the capacity to become independent and self-sufficient and their wages would be spent in their local economy and the wider economy, which would increase business revenues.

It is Mandate Trade Union’s position that the Low Pay Commission’s recommendations be prioritised by the Government by taking immediate steps to support the equal pay for young workers Bill, which would eradicate the discrimination and exploitation of young workers that currently exists in Ireland. The sub-minimum wage should be abolished in Ireland to eradicate discrimination and the exploitation of young workers by creating an equal playing field for all workers. Young workers should have the same rates as their comparable employees by creating fair wages for all ages.

The employers will argue that maintaining the sub-minimum wage rates is necessary because young workers lack experience. However, these national minimum wage and sub-minimum wage employers do not have incremental pay scales that recognise and award workers with rates of pay above and beyond the national minimum wage based on their experience and-or length of service. Instead, there is only one rate of pay, and that is the national minimum wage or the sub-minimum wage. These employers all provide induction training, normally conducted by a worker who is on the national minimum wage by “showing the young worker the ropes” or “shadowing for a day or two”. These young workers are then expected to have the same productivity as their comparable employees, with their pay being up to 30% less than the national minimum wage. This is an utterly imbalanced, unequal, unfair and disproportionate treatment of young workers in Ireland, which must cease and be eradicated immediately.

Mandate Trade Union urges the committee to support the equal pay for young workers Bill and move it on to the next stage of the legislative process. It is of utmost importance that age discrimination in the application of the sub-minimum wage, specifically concerning the national minimum wage, be eliminated without delay. This form of discrimination and exploitation against young workers has persisted for far too long. We firmly believe it is the duty of our Government to protect the rights and interests of all workers, regardless of their age. Young workers deserve to be treated fairly and equally, just like their older counterparts. It is unfair to pay them less solely based on their age, as this perpetuates inequality and undermines their contribution to the workforce.

By passing and adopting the Bill in the Statute Book, the committee can help rectify this long-standing injustice. Doing so would send a strong message that Ireland is committed to promoting equality in the workplace and ensuring a fair wage for all workers. It would also serve as a catalyst for positive change in the lives of young workers who have been unfairly disadvantaged for too long.

Our society cannot truly progress if we continue to tolerate such discriminatory practices. The passage of the Bill would not only make a significant difference in the lives of countless young workers but would also demonstrate Ireland's commitment to upholding the principles of fairness and equality. We strongly urge the committee to prioritise and support the equal pay for young workers Bill, ensuring its progression through the legislative process. Let us work together to put an end to age discrimination and the exploitation of young workers in Ireland. I thank the committee for the opportunity to make representations today.

Mr. Neil McDonnell:

ISME and Retail Excellence Ireland thank the Cathaoirleach and members of the joint committee for this opportunity to address it on the issue of sub-minimum rates of the national minimum wage.

The Low Pay Commission has recommended the abolition of the sub-minimum rates of pay under the national minimum wage. We note with regret that the Low Pay Commission has no SME representative in its membership, a fact that contributed significantly to its missteps in the past year, principally in recommending a 12.4% adjustment in the minimum wage which has resulted in a need for the Government to provide liquidity for SMEs. The Department of enterprise’s own report, An Assessment of the Cumulative Impact of Proposed Measures to Improve Working Conditions in Ireland, acknowledges that “payroll costs account for a significantly greater proportion of overall operating costs in more labour-intensive sectors, such as hospitality, retail and personal services”. Our concerns are not academic; they are real and measurable.

We know the members of the enterprise committee are being lobbied aggressively by those suggesting that this is simply an issue of equity, and that there are no material impediments to the removal of sub-minimum rates. This lobbying ignores the reality that 56% of firms in the most recent set of Revenue corporation tax returns showed a negative corporation tax return in 2022, a figure consistent with the Revenue’s 2021 returns. These businesses are almost all microbusinesses, and mostly inhabit the services sector. It is simply factually untrue to argue that microbusinesses and small businesses are greatly profitable enterprises with a capacity to continually inflate their labour cost input. The AIB purchasing managers' index fell in June, and confidence among service providers was the weakest since April 2023.

This is not an issue of equity. The phrase “a fair day’s pay for a fair day’s work” must be interpreted both ways, and those who lack the skills and experience of older work colleagues must necessarily accept their remuneration will reflect this. Similarly, those young workers who have acquired greater skills and experience than their peers are not constrained by law from accessing higher paid employment.

The sub-minimum rates are not discriminatory on age grounds. They represent a formal recognition of the lack of experience that is a function of youth. As such, they are not discriminatory, in the same way that the legal voting age, age-related prohibitions on alcohol and tobacco use, driver licensing laws, service-related pay increments, and the fact that people must be 21 years old to stand for election as a TD are not discriminatory on age grounds. We therefore recommend retention of sub-minimum rates of pay for younger workers, even if in modified form.

As the Cathaoirleach will see, there is a longer discussion in the document we submitted to the committee.

Dr. Paul Redmond:

I thank the Cathaoirleach for the invitation to the ESRI to appear before the committee to discuss its work on sub-minimum wages in Ireland. I am a senior research officer at the ESRI.

The topic of sub-minimum wages has received significant attention in recent years, at both a national and international level. It is currently an active area of policy debate in Europe. Of particular relevance for Ireland was the announcement in 2023 that Ireland was in breach of its labour rights obligations under the European Social Charter due to sub-minimum wage rates being deemed too low to allow a decent standard of living.

When thinking about policy in this area, there are several important points to consider. First, what is the rationale for having age-based sub-minimum wage rates to begin with, and what are the arguments for and against their use? Second, how many employees are in receipt of sub-minimum wages, and what are the typical characteristics of these employees? Third, what are the potential impacts of reforming or abolishing sub-minimum wage rates? To shed light on these issues, I am going to draw on recent research the ESRI published in 2023 as part of the ongoing ESRI and Low Pay Commission research programme.

Before discussing these issues in detail, as has already been said, it is useful to briefly summarise the situation as it currently stands. The minimum wage is currently €12.70 per hour. However, legislation allows employers to pay young workers an age-based sub-minimum rate. Those under 18 can be paid 70% of the full rate, those aged 18 can be paid 80%, while those aged 19 can be paid 90%. Other types of workers are also exempt in legislation from being paid the minimum wage. These include apprentices, people employed by close relatives and prisoners engaged in non-commercial work.

For the remainder of my opening statement, I am going to focus on age-based sub-minimum wage rates as they are of most relevance for the current discussion.

One of the main arguments in favour of sub-minimum wages for young people is to ensure wages are not set at a rate that is so high that employers are discouraged from hiring them. The rationale is that young workers may have less experience and lower productivity than older workers, which should be reflected in lower wages. Another argument in favour of sub-minimum wage rates for young people is to discourage early school leaving. However, previous research in this area suggests that the existence of sub-minimum wages will have little impact on early school leaving rates.

On the other hand, the main argument against sub-minimum youth rates is the equality argument, that there should be equal pay for equal work and age should not be used as a means of discrimination. Indeed, in recent debates on the Minimum Wage (Equal Pay for Young Workers) Bill 2022, it has been argued that sub-minimum wages should be abolished as they contravene equality legislation on the grounds of age-based discrimination. However, regarding the legality of sub-minimum youth rates, it is important to note that the Employment Equality Act 1998 allows for employees to be treated differently in certain circumstances. Anything legal under the National Minimum Wage Act 2000 is not deemed to be age-based discrimination under Irish legislation.

In our 2023 ESRI research on sub-minimum wages, we found that the incidence of sub-minimum wage employment in Ireland is low. We estimated that just 1 in every 140 employees in Ireland is paid a sub-minimum youth rate, which is equivalent to approximately 15,000 workers. Furthermore, while all employees aged 15 to 19 could legally be paid a sub-minimum wage rate, the majority are on higher rates of pay. Regarding the characteristics of those employees in receipt of sub-minimum youth rates, we found that just over half were women, and the vast majority, almost 80%, work in either the accommodation and food or retail sectors. Approximately one quarter work in small firms consisting of fewer than ten employees, while 80% are students.

Abolishing sub-minimum wage rates could, potentially, lead to positive and negative impacts for employees. The positive impact would be that current sub-minimum wage employees would see an increase in their hourly wage. However, abolishing sub-minimum wages could also lead to negative employment effects for young workers. Several published international studies have examined this issue. While some studies find no effects, others find evidence of negative impacts on hours worked and employment among young workers. These effects, however, tend to be quite small.

From an employer’s perspective, abolishing youth rates could see an increase in the wage bills of those employing workers on sub-minimum wages. Our research has shown that these employers are mainly concentrated in two sectors, namely, the accommodation and food sector and the retail sector. In related research we published in 2021, again as part of our ESRI-Low Pay Commission research programme, we found that the majority of employers do not employ minimum wage workers, and among those that do, minimum wage employees tend to make up a relatively small share of the overall workforce. Therefore, while some employers may be more affected than others, the overall direct impact on labour costs of abolishing sub-minimum wages would likely be quite low.

Let me conclude by once again nesting this debate within a wider European context. Minimum wages in the EU are quite common, with 22 of 27 EU countries currently having a statutory minimum wage. Age-based sub-minimum wages, however, are less common. Just one third of countries with a statutory minimum wage use sub-minimum youth rates. The EU directive on adequate minimum wages, published in 2022, states it is important to avoid sub-minimum wage rates being widely used as they risk having a negative impact on the adequacy of minimum wages. Taken together with the finding that Ireland is currently in breach of the European Social Charter, this would indicate that sub-minimum wage policy in Ireland is not consistent with the EU directive on adequate minimum wages. This is also reflected in the recent recommendation from the Low Pay Commission, which in June 2024 recommended the abolition of all sub-minimum wage rates in Ireland.

Maurice Quinlivan (Limerick City, Sinn Fein)
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I thank Dr. Redmond. I now invite the members to make their contributions and speak to the representatives here. I call Deputy O'Reilly.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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I thank our witnesses for their contributions. We had a private session beforehand in which we considered the elements of the National Minimum Wage (Equal Pay for Young Workers) Bill 2022. It was mentioned, and I think it bears being repeated in public, that much of the discussion we are having now about this subject directly mirrors that same kind of discussion that was had about equal pay for women, in respect of it being said they were only working for a bit of pin money, there was plenty of money at home and women were doing their jobs only as a bit of an ould hobby, with the chances being the full range of duties would not be being done anyway.

We need to contextualise this situation. We now know that the world did not come to a shuddering halt when that situation changed, although this might be because the gender pay gap still exists to a certain extent. When equal pay acts were brought in in this and other countries and states, their introduction enhanced the workplace. I imagine even the people who were very against this change at the time would agree now that it was a very positive move. I say this because the language being used around this proposed legislation struck me in terms of that comparable context.

Starting with the witnesses from Mandate, the use of sub-minimum rates of pay exists and is legal now because it is allowed for in legislation. The same disparity is mirrored in the social welfare legislation because we know what was done there. Is it the case that the members of the Mandate union receiving less money for their hourly rate are expected to do less work?

Mr. Greg Caffrey:

Absolutely not. They are expected to do the same levels of work and have the same output and productivity as their counterparts on the national minimum wage rate.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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Are they subject to the same disciplinary procedures, codes of conduct, codes of practice, etc? Is it the case that there is no derogation for them in this regard and they do not get 90% of a penalty or have 80% or 90% of the rules applied to them? Is it the case that they are subject to 100% of the rules, 100% of the expectations concerning the work and 100% of the hours for 80% of the wages?

Mr. Greg Caffrey:

Yes, absolutely. Employers will waste no time whatsoever in addressing any shortcomings with productivity in respect of a young worker not being up to their standard of work.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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Okay. My understanding is that these rates of pay are prevalent in areas and employment where there are low levels of union membership density. Is this correct?

Mr. Greg Caffrey:

Yes. It is predominantly a situation in the retail and bar sectors.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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There is obviously a correlation, then, between joining your trade union and improving your rate of pay, which I suppose bears repeating here.

Turning to our representatives from ISME, and concerning the report of the Low Pay Commission, there is a reference on page 35 - this is a subject we have discussed before and I am not going to bounce the witnesses into addressing a quote or anything like that - to the overwhelming majority of employers not discriminating against employees under the age of 20 by deploying sub-minimum rates. Most of the organisations' members, then, are paying wage rates above the minimum rate. They are not using this section. I am puzzled, then, as to why the witnesses are in here defending this provision because it does not seem to be massively prevalent. In fact, according to the research of the Low Pay Commission, and I do not know if the witnesses will contradict it here, and Dr. Redmond may be able to come in on this point too, is it not the case that the majority of employers are not paying these sub-minimum rates and are instead paying the full national minimum rate of pay?

Ms Jean McCabe:

It is important to note that the data the Deputy is referring to is from October 2023 and the landscape has changed significantly since then for many employers due to the increased cost of doing business. The increase in the national minimum wage has been a big factor. What we are seeing now is that more employers are starting to use sub-minimum wage rates as a tool to manage the costs in their business.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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Is Ms McCabe saying that before there was an increase in the cost of doing business, ISME would have been supportive of this proposed legislation? Has it only been since the advent of the increased cost of doing business that this opposition has emerged or am I wrong on this point?

Ms Jean McCabe:

Yes, the Deputy is wrong on that point. A point was brought up about the productivity of youth workers. The Central Statistics Office last year stated that labour productivity in sectors with high youth employment, which are retail and hospitality, had only grown by 0.3% annually over the past five years compared with the national average of 2.1%. This would say that youth employment is less productive and, therefore, more costly to train and upskill-----

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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I think that is a bit of a stretch, to be honest.

Ms Jean McCabe:

It is not. It is there in the CSO information. Let us just stick to the facts here.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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No, I am absolutely sticking to the facts, but I do think it is a bit of a stretch to take statistics from a sector and then automatically associate them with the number of youth workers employed in the sector. I ask Dr. Redmond to comment on this point.

Dr. Paul Redmond:

If we were to look at information on young workers who could all be legally paid the sub-minimum wage, those aged 19 or below, and again this is from 2023 and before the latest increase, nearly 80% are actually paid above this rate. The vast majority are either paid the full rate of the minimum wage or a higher rate. Again, when we drill down a bit deeper, there is a bit of a sliding scale. If we look at workers aged 15 to 17, just under half are paid the sub-minimum rate of pay. By the time we are looking at those aged 19, we find that just 10% of these youth workers are on a sub-minimum wage rate. The vast majority, therefore, are already paid in excess of the sub-minimum rate.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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I thank Dr. Redmond. Would Mr. McDonnell like to comment?

Mr. Neil McDonnell:

To be a little bit precise about this context, the law does apply different standards to youth workers. It is not true to say the rules and regulations that apply to the sub-minimum earners are the same as those applying to those workers over 18.

There are explicit restrictions in the Protection of Young Persons (Employment) Act 1996. There are restrictions, although I know we are not really talking in the main about those. In the summertime, in particular, there is a restriction on the amount of work that 14-year-olds and 15-year-olds can do. There is a restriction on work after 10 p.m. There is a restriction on work during school time. If 16-year-olds and 17-year-olds are working, they must register with Tusla, and there is control on the sale of alcohol.We have to view the sub-minimum rates in the context of the law which restricts what they can do in the workplace.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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If there are no restrictions in operation - say, where the business does not open past 10 o’clock and does not sell alcohol - would Mr. McDonnell accept that the younger people are doing the same type of work?

Mr. Neil McDonnell:

They are doing the same type of work but the productivity the business enjoys is not the same. There are people being inducted. There are people training them.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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I am sorry; I have to go, a Chathaoirligh. People get inducted at every age. A person could be out of the workforce for a long time and come back to do an induction at the age of 50. I am just not sure that argument cuts it. I am eating into my colleagues’ time, however. I have to go and speak in the Dáil Chamber, but I hope to come back.

Paul Gavan (Sinn Fein)
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Not at all. I thank all our guests this morning. My compliments to Deputy Murphy for this Bill. I had a similar Bill in the previous Seanad that was rejected by the Government at that time. I am hoping this Bill will make progress.

Let us stick to the evidence first of all. I note that the ESRI mentions that two thirds of EU countries do not have sub-minimum rates of pay. I will put this question to our colleagues from ISME and the ESRI. Is there evidence of detrimental impacts on young people because they have abolished these sub-minimum rates of pay?

Dr. Paul Redmond:

The evidence is mixed. Within the EU, Belgium recently reformed, let us say, its sub-minimum youth rates by increasing them and essentially abolishing most of them. There is a study for Belgium that shows little to no effect.

The Netherlands recently enough reformed its sub-minimum youth rates by increasing them. There was some evidence of negative impact, but it was relatively minor. Beyond the EU, other countries have recently changed their policy in this area. New Zealand did it, for example. Again, there was a study to examine whether it had significant impacts on youth unemployment or adverse impacts on hours worked, let us say. Again, the evidence showed that it was quite limited.

Paul Gavan (Sinn Fein)
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What about the damage to business? Did some businesses collapse in the wake of this type of change?

Dr. Paul Redmond:

I am not aware of any research that shows the widespread collapse of businesses in this regard.

Paul Gavan (Sinn Fein)
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Perhaps our colleagues in ISME would shed some light on that.

Ms Jean McCabe:

Sure, no problem. An OECD study from 2023 found that countries that have youth minimum wage rates have 7% higher youth employment, on average, compared to those countries that do not. Therefore, having sub-minimum rates incentivises more job opportunities for youth workers. There is a Eurofound study which highlights that EU countries with youth minimum wage rates have 18% higher youth labour market participation, on average, than those without. The data does show, therefore, that having youth minimum wage rates is quite productive for youth workers. There are more job opportunities available to them.

Paul Gavan (Sinn Fein)
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What about the evidence with regard to a fair day’s pay for a fair day’s work? ISME references people “who lack the skills and experience of older work colleagues.” I know first-hand of young people who work in the hospitality business. I am thinking of my son just a couple of years ago. His job was to serve the sausages and rashers each morning. He stood there and literally had to put them on the plate. Is Ms McCabe seriously suggesting that he should be paid lower a lower rate of pay than a colleague doing the same job?

Ms Jean McCabe:

We need to look at this with a much more holistic view. The Low Pay Commission made a fundamental mistake when it brought in the minimum wage increases in January without considering the impact they were going to have on hospitality and retail. The Department’s own report highlighted that the sector was extremely vulnerable as a result of that. In hindsight, it said the report should have been done beforehand.

Let us look at this in full-picture view. It is not just about an equal job for equal pay. We need to look at youth employment and the impact that has on those workers. Studies have shown that students and youth workers who have a part-time job are 33% less likely to suffer from mental health problems. This has a huge impact on their own well-being. I would hate to think that-----

Paul Gavan (Sinn Fein)
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Ms McCabe is predicting a crisis in youth unemployment as a result of the abolition of sub-minimum rates.

Ms Jean McCabe:

Absolutely. The studies have shown that-----

Paul Gavan (Sinn Fein)
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Ms McCabe said “absolutely”.

Ms Jean McCabe:

The studies have-----

Paul Gavan (Sinn Fein)
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I do not think that is credible.

Ms Jean McCabe:

The studies have shown that with a change in sub-minimum rates, the opportunity for youth employment declines. We did a survey with our own members-----

Paul Gavan (Sinn Fein)
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Can Ms McCabe deal with the issue of fairness? I described a typical hotel job that young people do and where we can see them most mornings. Is Ms McCabe seriously suggesting there should be different rates of pay for someone serving breakfast?

Ms Jean McCabe:

I will ask the question.

Paul Gavan (Sinn Fein)
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I would prefer if Ms McCabe answered it.

Ms Jean McCabe:

I am an employer. I have small business as well as this role in Retail Excellence.

Paul Gavan (Sinn Fein)
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Right.

Ms Jean McCabe:

I employ ten part-time girls. They are an amazing team. The increase in costs I have seen within my business in the last couple of months has been astronomical as a result of minimum wage increases. For the first time, I have utilised the sub-minimum rates as a tool to try to manage those costs. The question we need to ask is whether we really want to deny an opportunity for youth workers to have a part-time job that builds skills, resilience and a work ethic that will serve them for life. The studies show that we are going to end up reducing their opportunities in youth employment by abolishing this rate.

Paul Gavan (Sinn Fein)
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With respect, Ms McCabe still has not answered my question. A simple “Yes” or “No” will suffice.

Ms Jean McCabe:

The Senator might ask it again.

Paul Gavan (Sinn Fein)
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Is Ms McCabe suggesting that there should be separate rates of pay for someone serving breakfast in a hotel in the morning?

Ms Jean McCabe:

What is fair about the other colleague who has four years’ experience-----

Paul Gavan (Sinn Fein)
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They are doing the same job.

Ms Jean McCabe:

However, the colleague with four years’ experience is on €12.70 per hour and is twice as productive than the young trainee who is coming in the door.

Paul Gavan (Sinn Fein)
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Hold on; let us bring that back. Is Ms McCabe seriously telling me that this person is going to serve twice as many sausages as the person who is 17?

Mr. Neil McDonnell:

The Senator is making an argument against incremental pay in the public service when he makes that argument.

Paul Gavan (Sinn Fein)
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No, I am making an argument about equity.

Mr. Neil McDonnell:

As a matter of equity, he is actually making that argument.

Paul Gavan (Sinn Fein)
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If people do the same work, they should get paid the same pay.

Ms Jean McCabe:

They are not on the same wages.

Maurice Quinlivan (Limerick City, Sinn Fein)
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The Senator is going to run out of time.

Mr. Neil McDonnell:

Therefore, we should abolish incremental pay in the public service.

Paul Gavan (Sinn Fein)
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No, not at all.

Mr. Neil McDonnell:

They are two sides of the same coin.

Paul Gavan (Sinn Fein)
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Well, they are not.

Mr. Neil McDonnell:

The Senator is saying there is inequality for paying a lower rate of pay to an inexperienced worker when-----

Paul Gavan (Sinn Fein)
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We are talking about the lowest paid workers in the State.

Mr. Neil McDonnell:

Yes, because that is the base and legal minimum pay that may be paid in the State. We are not talking about the rate of pay that must be paid to them. As the ESRI confirmed - these are not ISME figures - they are only paid to 15,000 youth workers or 25% of the youth workforce.

Paul Gavan (Sinn Fein)
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Mr. McDonnell told us this is going to present a crisis in youth unemployment, which is nonsense.

Mr. Neil McDonnell:

We also need to recognise that the Irish minimum wage is the second highest in Europe after that in Luxembourg. It would be very unfair to characterise the minimum wage paid in Ireland as a low rate of pay when it objectively is the second highest in Europe.

Paul Gavan (Sinn Fein)
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It seems to me that Mr. McDonnell is making an argument against having a minimum wage here.

Maurice Quinlivan (Limerick City, Sinn Fein)
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I thank the Senator. The next slot is a Fine Gael slot.

Richard Bruton (Dublin Bay North, Fine Gael)
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I will go first if I may. We had a recommendation from the Low Pay Commission. I would be interested to hear the comments of the three representatives on it.

Essentially, it is proposing abolition, but it states that “When considering the timelines for any changes ... the Commission recognises that this is a complex issue that will require the full deliberation and consideration of Government and may require further legal advice and consultation with stakeholders.” That is what is currently under way. The issues it is exploring are signalled in its recommendations. It states that “no sooner than 1 January” should any changes be made. There should be a study after two years to see what impact it has had. It states that when this is introduced, consideration should be “given to how employers with a substantial proportion of young workers in receipt of sub-minimum wages can be supported” during the transition. I would like to hear about whether that is the correct approach. What are the areas in which this support may be needed if we are to go down this road? Have either the ESRI or ISME identified the sectors that will be put under pressure? What sort of support would be appropriate if this unanimous recommendation is accepted, which we have to recognise?

What are the issues that need further investigation? We have a certain amount of evidence from the ESRI and others. What is the next issue? Has the ESRI dug into the subsectors to see what the patterns are and where these particular impacts would be? The issue on which there is a difference is whether having lower youth rates does spur some opportunity. Does the ESRI have any experience in Ireland, as opposed to looking at international studies, as to the role that lower entry pay has played in opening up opportunities to young people?

Dr. Paul Redmond:

With regard to the timelines, the legality and the type of sectors most impacted, in fact the UK Low Pay Commission has made similar recommendations to those the Irish Low Pay Commission recently made. As it entails fairly substantial changes to policy there, it also suggests a gradual and cautious approach and adopting a relatively long timeline to try to change policy in this area.

With regard to the sectors most impacted, I can draw from several pieces. In our sub-minimum wage study we show that the vast majority of sub-minimum wage employees in Ireland work in accommodation, food or retail. These are the sectors that are likely to be most impacted by any policy change. We conducted a study in 2021 in which we used different data to look at the potential impact on the labour costs of firms associated with minimum wage increases in general. We did not look specifically at sub-minimum wage rates but at increases in the full rate of minimum wage. We were trying to assess whether firms in certain sectors experience substantial shocks to their average labour costs when the minimum wage increases. Overall we found that when we look at the data in general we do not see any major impact. We have to dig into the data to look at employers who employ a considerable share of minimum wage employees. By this I mean the only time we really detect an impact on labour costs is when we look at employers where more than half of the labour force is on the minimum wage. Even at this, the changes in average labour costs compared to all other firms is quite modest. This was for increases to the full rate of minimum wage.

If we were to abolish, reform or increase sub-minimum youth rates, the overall impact on direct labour costs would be quite low for the reasons I have outlined. Sub-minimum youth rate employment is relatively rare, although it may be increasing. Of the employers who employ some minimum wage workers, for the majority the share of employees on minimum wage is relatively low. If it were the case that sub-minimum wages were to be abolished or reformed, the Low Pay Commission has recommended that a study be undertaken after a couple of years so we can then establish whether it did have an impact on firms in certain sectors, as we do when the minimum wage is increased in general. We keep an eye on things to see whether there has been any adverse impact.

Richard Bruton (Dublin Bay North, Fine Gael)
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Is there any Irish evidence on this opportunity issue?

Dr. Paul Redmond:

Obviously work experience is good. When young workers acquire experience it is good. There is also the counter-argument in favour of sub-minimum youth rates, which is that if we have a sub-minimum youth rate, it encourages early school leaving. This is not really the case in Ireland anymore. It is a balance. We know it is good for young workers to acquire experience but, at the same time, if they are still in education, as 80% of sub-minimum youth rate workers are, the amount of experience they can acquire is quite limited.

Mr. Greg Caffrey:

With regard to some of the commentary from ISME, the avoidance of answering the question Senator Gavin asked, regarding whether his son or any other young worker should not receive the same rate of pay for comparative work, is incredible. In the reply it was also mentioned that the person giving the response is a small employer who employs a part-time team. It would be very interesting to know whether she is a national minimum wage employer or a sub-national minimum wage employer. Do the workers employed by her have access to collective bargaining rights? The majority of young paid workers in these sectors do not have access to collective bargaining rights because the members of ISME do not engage with the trade unions to facilitate collective bargaining on pay.

Richard Bruton (Dublin Bay North, Fine Gael)
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I asked a question on whether the approach being adopted by the Low Pay Commission meets the expectations of ISME and Mandate.

Mr. Neil McDonnell:

We are not happy with the approach of the Low Pay Commission. We do not have representation on it so there is no one to speak with our voice. On the question and point about supports, business does not want support. Effectively, we are saying if the cost base shifts so much that a business needs State support, we have interfered with the cost base too much. That is the honest answer. If the State has to intervene, the quickest way to do so is through the PRSI system.

The information is out there. For example, the report prepared by Dr. Dermot Coates at the Department of enterprise is very explicit on the sectors that are most affected. The data is already there. In some of these cases we are speaking about businesses with a labour percentage of the cost of sales of 50%, 60% or 70%. We absolutely acknowledge the ESRI statistics showing that this refers to a very small cohort but we have to bear in mind that if we remove this incentive it will affect employers, such as Willow with Jean McCabe. Not alone would there be no incentive to employ, there would be an active disincentive to employ someone, as the law intervenes to have that work treated differently. The law states the working structure and break structure are different for these people. Unless there is contemplation of a change in the other protections for young workers, it would not be fair in this regard.

As to the issue of collective bargaining, Deputy Bruton is aware that for a very long time we have sought to engage with the collective bargaining instruments in the State through LEEF. We are actively being prevented from doing so. I know there is denial that the trade union movement does not want to engage with us but we feel that in this committee and others there is a desire to keep small business away from the collective bargaining machinery of the State through LEEF.

Mr. Greg Caffrey:

Mandate Trade Union fully supports the recommendation the Low Pay Commission has produced. It is unequal for workers to be placed in any employment where they carry out the same level of work as comparative employees and are paid significantly lower than them. The maximum minimum wage of €12.70 per hour is the floor for pay for workers in this country. It is further diluted by the application of sub-minimum wage rates. The national minimum wage is a floor and not a ceiling. We have heard some concerns from ISME about business costs and the dramatic increase over the past six months. There is a provision in the National Minimum Wage Act whereby an employer can go to the Labour Court and substantiate that they have an inability to pay the national minimum wage. There is a provision under which the Labour Court will give them a deferral if they can justify their claim.

Matt Shanahan (Waterford, Independent)
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I thank the witnesses for their submissions. Will the ESRI elaborate on what it said earlier about 80% of those on low pay or the minimum wage receiving more? Employers are choosing to pay people more. Essentially this affects the employment in the economy at the moment. We are at full employment and probably beyond it. There is quite a lot of difficulty in filling positions. A spillover effect of the most recent increase in the national minimum wage has been cited. Does the ESRI know of any research that speaks about that and the change in the present balance that has been proposed?

Dr. Paul Redmond:

By spillover effect does the Deputy mean people are paid more?

Matt Shanahan (Waterford, Independent)
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Yes.

Dr. Paul Redmond:

The ESRI did a study in which we looked at the spillover effects associated with a general minimum wage increase and we found some. The wages of those earning slightly above the minimum wage shift up a little on average as well. The idea is that people not only want to preserve their actual wage, but also the differential. If someone who initially earns less than me gets a pay rise, I will want a pay rise. We found that when looking at general minimum wage increases. It is quite modest. It does not extend far up the wage distribution, but it does happen.

While we have no direct evidence about sub-minimum wages, several inferences can be made. It comes back to the fact that, because so few workers are paid sub-minimum wage rates to begin with - 80% of people who could be paid that rate are not - if we talk about abolishing those rates, the impact or spillover effect is likely to be quite different. I would not expect there to be a significant spillover effect for two main reasons. First, as I said, because the incidence is quite low. Second, abolishing sub-minimum rates is quite different from increasing the adult rate. Increasing the adult rate essentially raises the wage floor and we would expect wage spillovers as a result. However, abolishing a sub-minimum rate just equalises pay at the bottom of the distribution for a very small number of workers who earn less than the full adult rate. While I have no direct evidence on it, we have evidence on the minimum wage in general and I would not expect any significant spillovers.

Matt Shanahan (Waterford, Independent)
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I have spoken to quite a few small employers since the recent round of pay restructuring. Spillover is definitely a feature and it goes right up to people who are due a far higher wage. People peg themselves against what lower paid people are getting in jobs. I wonder where Dr. Redmond's data is from.

To ISME, will Ms. McCabe repeat the comments she made about the reports she mentioned on youth employment? I did not quite catch them.

Ms Jean McCabe:

Is the Deputy referring to the point on the number of jobs available or on the impact on well-being?

Matt Shanahan (Waterford, Independent)
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On the impact on well-being for starters.

Ms Jean McCabe:

A study by the UCD school of psychology highlighted that 40% of young Irish adults reported depression levels outside the national norm. A study done in the UK showed that teenagers who worked part-time were 33% less likely to suffer from depression by the age of 25. A Growing Up in Ireland study from 2022 found that teenagers who worked part-time were 28% less likely to report feelings of social isolation. Apart from the sub-minimum rates being used as a tool to manage the cost base of an SME, and it is difficult for many businesses right now, my concern is that there is a much bigger picture to comprehend, namely, the impact of this on the availability of jobs for youth workers. This has a real impact on their well-being, life skills and the competitiveness and productivity of Ireland. It is hard to find data that shows that the opportunity for youth workers being diminished is bad for their long-term outcome.

Matt Shanahan (Waterford, Independent)
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Another comment was made that we have the second highest minimum wage in Europe. That needs to be borne in mind.

Deputy Paul Murphy raised points about a large amount of informal employment going on where employers are taking on people, including my family members. I have teenagers who are working and being paid more than the minimum wage because employers choose to do so. Due to the employment situation, it is hard to find workers and if they find people who are prepared to do it to a good level, they are prepared to pay.

I am concerned about spillover. According to the ESRI, 80% of the 15,000 people affected are being paid more than the minimum threshold. That leaves approximately 3,000 people. Deputy Paul Murphy spoke about people not being able to pay rent and so forth and there may well be people in that situation, but I do know how many of the 3,000 are included. That brings us back to the question of whether the State should be stepping in to support employers and that is back to a cost on the taxpayer and the economy. It is not free money. Significant thought needs to be given to this. I am concerned. I believe there will be an impact on the take-up of employment, especially for youngsters aged 15 to 17 and upwards, in informal employment. They will be the most affected. Does Mandate have any thoughts on that?

Mr. Greg Caffrey:

There does not appear to be any evidence to support the Deputy's concerns or-----

Matt Shanahan (Waterford, Independent)
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I have spoken to a lot employers. That is the evidence I have. It may be anecdotal, but I speak to them and they tell me exactly that. Once wages go beyond a certain level, they either do not employ or they go far higher and try to get a productivity agreement with their existing workforce to pay more. That is what they do.

Mr. Greg Caffrey:

The evidence I have anecdotally is that it is a discouraging factor when any employees who enter any employment are paid significantly less than their counterparts for carrying out the same level of work. If they do not carry out the same level of work, they are subject to the same disciplinary processes and sanctions as the comparable workers.

Matt Shanahan (Waterford, Independent)
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It is not fair not to take into account the ability of people aged 15, 16 and 17 to do the role, including their experience, their ability to communicate and their life experience, which are all part of what employers pay for. I accept where Mr. Caffrey is coming from with the equality issue, but we are probably stretching it too thin if we start to say that people aged 15, 16 and 17, entering the workforce, should be paid the same as someone who has five or ten years' experience of working at a relatively unskilled level.

Mr. Greg Caffrey:

On the comparison the Deputy is making, employers who recognise length of service and experience in employment apply incremental pay rates. In the sectors we are talking about, there is no incremental pay, no recognition of the level of experience of service of employees. They are simply paid the national minimum wage and people under 20 years of age are being paid sub-minimum rates of pay, but they are doing exactly the same job.

Matt Shanahan (Waterford, Independent)
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I would argue that with where AI is going, this is about low skill sets.

Maurice Quinlivan (Limerick City, Sinn Fein)
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The Deputy is way over his time. We will move on to the next slot, which is Solidarity-People Before Profit. Uniquely, we have the Bill's sponsors here so I will give them a little additional time. They have ten minutes between the two of them.

Maurice Quinlivan (Limerick City, Sinn Fein)
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He scored the best goal of the tournament.

Mr. Greg Caffrey:

Yes, absolutely. We are currently running a national campaign to have sub-minimum rates abolished. The Taoiseach has given a commitment to have that looked at by budget time. However, we will be actively campaigning nationally to bring that about. Subsequently, if it is not endorsed by the Government by budget time, we certainly will be running that campaign further to seek political support and to make it an election manifesto issue to bring about equality for young workers in this country.

Mr. Greg Caffrey:

It is to the best of our knowledge, yes.

Maurice Quinlivan (Limerick City, Sinn Fein)
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I ask the Deputy not to mention any particular companies. They are not here to defend themselves.

Maurice Quinlivan (Limerick City, Sinn Fein)
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Companies can be mentioned but do not name a company.

Mr. Greg Caffrey:

Sub-minimum wage rates apply far and wide through the sectors we have mentioned.

Mr. Greg Caffrey:

I do not have the specific details.

Mr. Greg Caffrey:

It was. It has been left there and ignored and has not been acted upon by the current Government.

Mr. Greg Caffrey:

That was a unanimous recommendation, which I believe to be a precedent for the Low Pay Commission in its recommendations.

Paul Murphy (Dublin South West, RISE)
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Senator Gavan asked whether there would be an explosion of youth unemployment were there to be an abolition of sub-minimum wage rates and Ms McCabe said absolutely. Does she stand over that?

Ms Jean McCabe:

It certainly will have an effect, yes. All the research shows it will have an impact. To quote the ESRI’s own studies, it found that a 1% increase in the minimum wage is associated with a 0.49% decrease in employment among workers aged 15 to 24.

Paul Murphy (Dublin South West, RISE)
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That relates to an increase in the minimum wage generally as opposed to in this area. To quote from the Low Pay Commission, it stated:

The ... most common argument was that increasing or abolishing sub minimum youth rates might increase youth unemployment. This argument was made by Ibec, Retail Ireland, the VFI, the IHF, the CSNA and ISME.

It goes on to state "none of the submissions provided evidence to this effect". Why did ISME not provide any evidence to back up this assertion?

Ms Jean McCabe:

Because the ESRI has the evidence in its own studies.

Paul Murphy (Dublin South West, RISE)
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I ask the witnesses from the ESRI to comment. Do they think there would be an explosion of youth unemployment?

Dr. Paul Redmond:

No, we have studied the impact of unemployment extensively following a series of minimum wage increases. The most recent thing we looked at was the cumulative impact of three minimum wage increases. We found no such impact on employment. That said, we did find some evidence of a modest reduction overall in hours worked. When you drill into it and look at the different sectors, you can see some differences across sectors. We found that in manufacturing and accommodation of food, for example, the reduction in hours associated with minimum wage increases is a bit larger. However, what we did then was to take these estimates and suppose that the average worker did have his or her hours cut by that amount. Even in those cases the minimum wage increases were sufficient to offset the hour reductions in terms of their overall wages.

In respect of the evidence on youth unemployment, I have reviewed the evidence that exists and none of the evidence suggests to me that there would be an explosion in youth unemployment. I have seen no evidence to that effect in any of the studies I have looked at. I am absolutely aware of the OECD study referenced earlier. It looks at an association between youth employment and sub-minimum wages and finds some association there, but that relates to particular countries. The other thing that is very important to address, as it has come up a couple of times and is actually incorrect, is that it has been said that the minimum wage in Ireland is somehow inordinately high when compared with other European countries. For a start, the adult minimum wage is the second highest in nominal terms after Luxembourg but nominal terms do not mean a lot. When one takes purchasing power standards into account and the cost of living, Ireland drops down to seventh. The idea that the full rate is inordinately high in Ireland is not true.

The other thing that is important to address is that when we are talking about the rate of minimum wage in Ireland compared with other countries and whether it is high or not, we are talking about sub-minimum youth rates. It is objectively true that sub-minimum youth rates in Ireland stand out as being low, which is precisely the reason that the European Social Charter raised them in the first place. When the European Social Charter addressed this in 2023, it looked at the adequacy of not only sub-minimum rates but minimum wages in general across Europe. Ireland was singled out as the only country having youth rates deemed too low to allow a decent standard of living. A couple of other countries were singled out for their minimum wages in general but Ireland was singled out in that regard. We have internationally accepted benchmarks by which we can assess whether a rate, the full or youth minimum wage rate is too high or too low. By those standards, Ireland has been deemed to have sub-minimum youth rates that are too low.

Mr. Neil McDonnell:

I will raise a couple of things. First, the ESRI study from January 2022 analysed the effect of a 10% movement in the minimum wage over three years. That did have a negative hours effect in those certain sectors we are talking about. I appreciate we are talking about the minimum wage rather than the sub-minimum rates, as opposed to 12.4% in one quarter, which is what happened this year. We must not forget that in the round, we are at full employment now, or very close to it. In the current environment, we are not going to see a large unemployment effect because the market is taking any available labour. The issue is that at the point at which the economy turns, youth labour will become progressively less attractive to employers. As we are talking in particular about 16 and 17-year-olds, we have to be honest about this, we are talking about employers who are effectively acting in loco parentis for the summer.

Paul Murphy (Dublin South West, RISE)
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We should be paying them really.

Mr. Neil McDonnell:

We have to be honest about this and say we are entrusting children to work in the workplace to employers who have to look after them and must comply with the law while doing so. They are not going to be relatively attractive from an employment point of view. It is in our longer paper that I reference a remark passed in financial services, which is very far from where we are talking about, in which there is a reference to an employment practice within financial services. In financial services, they are now refusing to recruit young workers who cannot demonstrate on their curricula vitae that they worked in a pub, restaurant, hotel or shop.

This is because they have not developed the requisite social skills for dealing with adults if they have not done so. We are not saying that those working opportunities will end for those workers but what we are saying is they will become relatively less attractive to employers who are required not to differentiate between rates of pay.

Finally, on the purchasing power parity argument, we are in complete agreement with the ESRI on that. The PPP argument is always made when one is discussing these things but what we say is one will not repair that by driving up minimum wages. One has to address the cost of living and the primary driver of that is the cost of housing. Employers will never be able to bridge that gap by forcing up wages and when the economy turns, one will see expensive labour will be the first thing that will be shed from businesses.

Paul Murphy (Dublin South West, RISE)
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If I can ask something of Mandate, the point was being made about the impact on mental health - the idea being that these sub-minimum wage rates are good for young people because it means that more of them are in employment and that has a positive impact on their mental health. In terms of Mr. Mannion's interaction with young workers, what is the impact on their mental health of being paid a lesser rate for doing the same job as their work mates?

Mr. Andrew Mannion:

On a bit of background, my name is Andrew. I was an assistant manager in a filling station in Ballinasloe. In 2022, I began organising workers to join Mandate to better our pay and conditions. At the time, we were probably employing between ten and 12 workers who would have been subject to the sub-minimum rates. Approximately half of them were in college. In particular, two girls who were working there were living in shared accommodation in Dublin while they were in college. On any given day, they could have been sharing that house with between eight and ten people. They could not, on the wages they were on, have been only working on a Saturday or Sunday. Sometimes they would have to come back to work on a Friday evening after college - racing down after they had finished - for two to three days of work. Then they had to go into a situation where they were living in overcramped accommodation. Having spoken to them, I know that had a serious impact on their daily lives. They did not have a place to call their own. The house was completely overrun with people. Those are two stories.

I guarantee that the other workers around the country who are on these sub-minimum rates are trying to combat the spiralling cost of living. Whether that is increases in rents, increases in the cost of groceries, transport - you name it - they are all playing into this. It will have a serious impact on people's mental health.

The workers there were not guaranteed a certain amount of hours. At the employer's discretion, they could have had their hours cut to eight. They could have had their hours cut to four hours a week, which would barely cover the cost of getting up and down from Dublin to that job in Ballinasloe. It obviously has a huge impact on their mental health to have to worry about paying their rent and paying all the other bills that come along with that.

Paul Murphy (Dublin South West, RISE)
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Can I keep going?

Maurice Quinlivan (Limerick City, Sinn Fein)
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Briefly.

Mr. Greg Caffrey:

To expand on that, it is absolutely a disincentive for a young worker to be paid significantly lower than a comparative worker and it has a detrimental effect on their mental health and their well-being that they are being subjected to that unfair and unequal treatment in the workplace.

Paul Murphy (Dublin South West, RISE)
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I have a question to ISME. It relates to the comment about being in loco parentis. It is, in my opinion, a patronising approach that these people are not doing real work when they are employed to do real work. They can be asked to do real work and many of them are asked to do real work. I am interested in Mr. McDonnell's response. According to ISME's opening statement:

... to give a 16-year-old an adult wage without clear guidance and support, which is not an employer's job creates poor money habits. They usually lack bills and expenses, and may favour gratification before learning how to budget, save and create sustainable spending habits.

What exactly is ISME getting at there? What is the argument? Does ISME want these young workers to be paid less than the minimum wage because it feels that if they are paid more than that, they will spend it all on sweets? Is that its concern?

Mr. Neil McDonnell:

It is not. We are back to the point I initially made directly to the Deputy. We are dealing with young people who are entering the workforce for the first time. Parents are entrusting those young people to an employer at this time of year, in particular, as the secondary schools close. This happens every year. It is a traditional work pattern, as the full-time workers leave retail establishments such as Willow and are replaced by youth workers who frankly - we need to be adult about this, and blunt and direct about it - do not come in with the experience or the productivity of other workers. It may be their first employment.

Notwithstanding the arguments, I absolutely get the case that has been made by Mandate - you would not put a blade of grass between us - on the cost-of-accommodation issue. That is an entirely different issue. There cannot be a legitimate expectation that this can be fixed by employers. We have a problem that the tax system has driven out available rental accommodation from the Irish market over the past ten or 15 years. That is not the fault of employers and employers will not be able to fix that. If we do not reasonably recognise that employers have a job to do with youth workers, unfortunately, when the economy changes, this set of workers will not be an attractive labour cohort to small employers.

Maurice Quinlivan (Limerick City, Sinn Fein)
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I thank Mr. McDonnell and Deputy Paul Murphy. We will now move on to the next slot. It is Sinn Féin again. I call Senator Gavan.

Paul Gavan (Sinn Fein)
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I want to talk to our colleagues in Mandate first because it was an interesting point that Deputy Barry made. It is probably worth expanding on it a little. Is Mandate saying that there are well-known retail chains - very profitable companies - currently utilising sub-minimum rates of pay on a daily basis?

Mr. Greg Caffrey:

Absolutely yes, without a shadow of a doubt. Not all of them, but there is a large portion of them who apply these rates to youth workers.

Paul Gavan (Sinn Fein)
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How can they possibly justify that given their levels of profitability?

Mr. Greg Caffrey:

They hide behind the legislation.

Paul Gavan (Sinn Fein)
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To direct the question in a different way to our colleagues from ISME, is it not grossly unfair on its members who pay the full minimum wage to have them competing against people paying sub-minimum rates of pay? As Mr. McDonnell has acknowledged, the majority of ISME's members do not pay sub-minimum rates of pay. That is what the evidence from the ESRI tells us. Is it not grossly unfair that they have to compete with employers who choose to pay these awful sub-minimum rates of pay?

Mr. Neil McDonnell:

We have complained for a long time about the crowding effects in the Irish economy for small businesses employing people. It is a problem not in the youth employment sector but in the adult employment sector. To be honest, the biggest threats come from the multinationals and from the public service, where you have a 53% premium from the small business weekly wage to the average public service wage. Our members are not able to compete with that.

They do not find this grossly discriminatory. Many of these small businesses are very hardscrabble businesses. You are talking about the west of Ireland, where in some cases the only employer on the main street is a small business. They are really doing their best for their employees.

I would like to respond to a question asked earlier by Deputy Shanahan. I was in the west of Ireland in May talking to small business owners. A lady came up to me who has a number of dry-cleaning outlets. She paid the manager of one of her dry-cleaning establishments in Mayo the 12.4% that went on the minimum wage. A month later, that employee came back to her and said she had lost her medical card because of that pay rise but when she went into her Intreo office, the Intreo office said if you go from a five-day week to a four-day week they would get her back her medical card. On top of that, she was told that if she dropped from a four-day to a three-day week they would get her the HAP payment for her rent. This is what employers are dealing with on a day-do-day basis. The State is actually telling people to work less and it will pay them more money through the social protection system.

Paul Gavan (Sinn Fein)
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Mr. McDonnell has other points to make in terms of broader issues. I do not think we would agree on them but it is probably worth having that conversation at some point, in fairness.

I was intrigued by the enthusiasm for collective bargaining in an earlier reference Mr. McDonnell made. What percentage of ISME members recognise trade unions?

Mr. Neil McDonnell:

I have no idea because it is not a question we ask. Many of them facilitate payment through payroll for employees who want to be members of trade unions. There is little point in talking about collective bargaining rights when the State does not recognise the locus of small business employers.

Paul Gavan (Sinn Fein)
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Is Mr. McDonnell saying he does not know what percentage of his membership recognise trade unions?

Mr. Neil McDonnell:

I would not know. It is not a question we would ever ask. If we are not recognised as negotiating partners and employers by the State, why is it something we would entertain for employees?

Paul Gavan (Sinn Fein)
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It is a glaring contradiction. ISME says it wants to take part in collective bargaining at State level but it cannot tell us what percentage of its membership recognises trade unions. I will put it out there that I would say it is a fairly round figure.

Mr. Neil McDonnell:

I do not disagree. We have the absurdity that I and other ISME members and officials sit down with people from SIPTU and ICTU at ETUC meetings in Brussels, or indeed in Dublin, yet we are precluded from doing it here.

Paul Gavan (Sinn Fein)
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Maybe ISME should start at local level. I will let my colleague from Mandate come in.

Mr. Greg Caffrey:

Our estimation is that the proportion is significantly low. Many ISME members actively engage in union-busting tactics to keep unions out of their employments so collective bargaining cannot be facilitated in those employments.

Paul Gavan (Sinn Fein)
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So ISME wants to take part in collective bargaining but its members actively engage in union-busting.

Mr. Neil McDonnell:

"Union-busting" is a very emotive term. I think even if-----

Paul Gavan (Sinn Fein)
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What term would you use?

Mr. Neil McDonnell:

Looking back over the history of trade union engagement in the Irish SME sector, the longevity of businesses which have recognised and dealt with trade unions is, unfortunately, not great. Can members think of any profitable long-running Irish business that has dealt with trade unions? I have never met a trade unionist who did not want to close down an Irish business. The Senator and I met in a former life-----

Paul Gavan (Sinn Fein)
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Chair, seriously, those comments are-----

Mr. Greg Caffrey:

That is an incredible comment.

Mr. Neil McDonnell:

The Senator and I met in a former life-----

Paul Gavan (Sinn Fein)
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We certainly did. I remember it well.

Mr. Neil McDonnell:

-----where all of those great jobs paying multinational wages for truck drivers are all gone because of-----

Paul Gavan (Sinn Fein)
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Is it because of trade unions? That is an outrageous statement.

Mr. Neil McDonnell:

-----the behaviour and wildcat actions of SIPTU drivers.

Paul Gavan (Sinn Fein)
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That really shows where ISME is, not just on this. It is so far to the right it is frightening.

Mr. Greg Caffrey:

When I organised workers to better their pay and conditions in the filling stations I worked in, we were branded as agitators who wanted to go out on strike for the sake of doing it. I was the assistant manager there. I wanted those working with me to be happy and comfortable in their jobs. We are not about trying to tear down companies. We are trying to make life for workers in their employments better. Unfortunately, that comes down to pay. We talked about the mental health impacts of it. It is ridiculous to say trade unionists want to tear down these employments. We want workers to be in work and earn a wage, particularly now with the cost-of-living crisis. That is one of the-----

Paul Gavan (Sinn Fein)
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There is a stark contrast here. We regularly have IBEC in and I disagree with it on many issues but you would never hear someone from IBEC come out with a statement like that. It is outrageous.

David Stanton (Cork East, Fine Gael)
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I welcome everybody to the meeting. This is a very interesting conversation. I ask Mr. Redmond about the following from Mr. McDonnell's written submission:

We must also recognise that it has become government policy in recent years to pass more of the burden of the “social wage” to employers via the higher minimum wage, domestic violence leave, statutory sick pay, etc. This process will continue with the introduction of pensions auto enrolment.

Many of those issues have been discussed in this committee and they are all positive. Most people think they are positive for workers and society generally, but they impose an extra cost on businesses. Has the ESRI carried out, or does it plan to carry out, any study on the costs the changes have imposed on the businesses and sectors involved?

Dr. Paul Redmond:

Not to my knowledge. Many of them are fairly recent, such as statutory sick pay, pension auto-enrolment and minimum wage changes. I appreciate several policy changes have happened essentially at once and all contribute to increased costs for employers. That said, all we can deal with from our research is the issue of the minimum wage and sub-minimum wages.

David Stanton (Cork East, Fine Gael)
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I have met a number of relatively small business owners and they all feel the same pressure coming on them from these measures. They are good measures. I am not saying they should not be introduced and have yet to meet an employer who says that, but they are bringing on extra costs. This is in the context of another change coming down the tracks with this particular one. We have three levels of sub-minimum wage: the 17 or younger, the 18 and the 19. Are there figures for how many are in each of these categories?

Dr. Paul Redmond:

I do not have the precise figures for each category but I can offer the percentage of workers in each category that earn a sub-minimum youth rate. Of workers from 15 to 17, about 40% to 45% earn a sub-minimum youth rate.

David Stanton (Cork East, Fine Gael)
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What number is that roughly?

Dr. Paul Redmond:

I do not have it to hand.

David Stanton (Cork East, Fine Gael)
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Is it 45% of the 15,000 mentioned earlier?

Dr. Paul Redmond:

No, it is 45% of workers from 15 to 17, so it is not directly what the Deputy asked. About 10% of 19-year-olds earn a sub-minimum youth rate. I appreciate it is not directly what the Deputy is asking but I do not have the number of employees to hand.

David Stanton (Cork East, Fine Gael)
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A number of reasons have been mentioned by ISME, the first being the extra cost. It has been said that if somebody does a job and an older person does the same job, then the productivity is equal and they should be paid the same. That argument has been made and I do not see why it should not be the case. They have the same productivity and make the same profit for the company.

The next issue is to do with training. It is said that young people often do not have the training required. We have a National Training Fund. We have a wage subsidy scheme for people with disabilities who do not have the same level of productivity. With respect to training costs, has consideration been given to using the National Training Fund to top up where productivity is not on a par? Where a younger person coming in does not have the same experience, the productivity is less and training is required by the employer, could the National Training Fund be used to make up the difference, like with the wage subsidy scheme? Will Mr. Caffrey comment on that idea? It has been put to me by workers and employers because the National Training Fund is hugely in surplus at the moment.

Mr. Greg Caffrey:

I do not have any figures on that but the training provided in national minimum wage and sub-minimum wage employments is not certified training. That training is facilitated by a co-worker who shows someone the ropes or is shadowed on the job for a day or two. After that, there is a demand and insistence from the employer to have that young worker at the same productivity level as comparable workers. If the worker is not at that level, he or she will be subjected almost immediately to disciplinary procedures. The National Training Fund and course criteria contained in that are predominantly around jobs that have a prerequisite training experience that pays above the national minimum wage.

Mr. Andrew Mannion:

To back up what Mr. Caffrey was saying, in my employment I was the training champion so when new hires came in, I went through the policies and provided training for them. When I was not there for the first couple of weeks after new employees started, other co-workers took on the responsibility to show them, particularly regarding tills and dealing with cash for the first time.

In the instance where I was not there for the first couple of weeks these new employees started, other co-workers took on that responsibility to show them, particularly with tills and dealing with cash for the first time. The responsibility did, unfortunately, happen to fall on workers who were on sub-minimum wages. As the assistant manager at the time, I was getting far more than the minimum wage but there were workers and supervisors who were on these low rates and they were also expected to show new hires how to come in. The onus is on the employer. My employer had a wide breadth of training and policies that needed to be explained to young workers. There were probation reviews after a certain number of months and performance was reviewed. If you were not up to scratch, whether you were 16 years old or 55, your progress was looked at. It is not fair to say that training is an issue because it is provided and it is mandated that we provide all of these different types of training to new staff.

David Stanton (Cork East, Fine Gael)
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Of course, it could also be argued that another staff member's time being used to train a new person is time that worker is not producing work for the company, so there is a double-whammy there. Did Mr. McDonnell want to come in on those issues?

Mr. Neil McDonnell:

We run a HR line for our employees and we have never heard of a disciplinary hearing over productivity. I have never heard of a worker being disciplined nor has any employer asked us the question. Yes, there is performance and productivity but these are different from discipline. I do not think you would have a good day out as an employer in the WRC if you were disciplining someone over productivity.

We would be against the use of the NTF because we had our Skillnet budget reduced for 2024 despite high demand for training this year. We had to cut our training because it was cut in budget 2024 and we are looking for a substantial increase, no hints, in budget 2025. That training levy is constrained by law on what it can be spent on and it is for the training and development of workers and their employers. We would not want to see that going anywhere else. The fund is in ridiculous surplus of €1.5 billion and swelling. The Skillnet budget is €56 million. We need to see that at least doubled.

Mr. Greg Caffrey:

The comments made on disciplinaries show how out of touch ISME is in relation to that. Where cases relating to dismissal through a disciplinary process are taken by employees to the WRC, in most cases ISME's members simply do not turn up or engage with the WRC in that regard. When ISME says it does not know or it is unheard of, that will probably attest to one of the reasons.

Paul Murphy (Dublin South West, RISE)
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Returning to Mr. McDonnell and this argument of whether they are discriminatory or not, we obviously acknowledge they are not illegal and they are lawful. He made the comparison with the legal voting age, the age to stand for the Dáil, the age to buy alcohol or to drive, etc. He is not accepting, however, that we are talking in those circumstances about an age before which people are not allowed to do something and after which they are allowed. You do not get 80% ,90% or 70% of your vote; you get to vote. Similarly, you do not pay 80% of the price of alcohol; you get to buy alcohol. Does Mr. McDonnell not accept there is a difference here? We are allowing people at a certain age to work, the employer is entitled to ask them to do the full range of things, generally speaking, although there are some exceptions for under-18s, but yet they are not being given the protection of the minimum wage rate we give to workers in general.

Mr. Neil McDonnell:

Absolutely. What Deputy Murphy is referring to in one case is an absolute. It is a go or no go based on age. With sub-minimum rates, we are talking about a partial and we absolutely acknowledge the distinction. It is not dissimilar, however, to the point raised by Senator Gavan. The law inherently recognises a right to pay for experience through incremental pay. Incremental pay tends not to happen in small businesses. What happens is some workers are simply on higher rates of pay. They sit down with their boss, they say they are in the business a certain number of years and this is what they are worth. That is how it happens externally.

All we are doing is citing the ESRI figures that show that these rates in the real world apply to a minority of workers. All we are asking for is the right to retain those rates such that the legal minimum pay that can be given to workers should necessarily be lower for those who potentially or probably come in on a first employment, who are, as Deputy Stanton said, considerably less experienced, and who are taking the time of a more senior employee or a different employee who is less productive as a result. That is all we are asking for. We are not saying we should be discriminating against these people or that they should be treated less than, but we also recognise-----

Paul Murphy (Dublin South West, RISE)
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Mr. McDonnell is asking for the right to treat them less than. He is asking that he continue to be allowed to pay them less than the minimum wage. Nothing we are doing here is stopping people getting more for higher experience.

Mr. Neil McDonnell:

In exactly the same way as other laws, such as, and explicitly and specifically, the Protection of Young Persons (Employment) Act 1996, differentiate between those workers. I have not heard it said, and I have not asked Deputy Murphy, nor do I intend to, whether the State is going to remove those protections that apply to under-18 workers as part of any consideration of this. The law and the State recognise that those youth workers are in a different position and need to be treated differently purely as a result of their youth.

Paul Murphy (Dublin South West, RISE)
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Mr. McDonnell does at least agree that the sub-minimum wage rates for 18- and 19-year-olds should be abolished.

Mr. Neil McDonnell:

No.

Paul Murphy (Dublin South West, RISE)
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The arguments Mr. McDonnell just made do not apply to 18- and 19-year-olds.

Mr. Neil McDonnell:

We have said we want retention of the sub-minimum rates for younger workers.

Paul Murphy (Dublin South West, RISE)
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It seems to me that many of the arguments Mr. McDonnell makes, in responding to Deputy Stanton, are about experience. The point has been made repeatedly that I could lose my seat in the next general election, walk into a petrol station, look for a job, not be particularly good at it for the first couple of weeks and need training, but I would not legally be allowed to be paid less than the minimum wage as a result of age. We previously had trainee rates that were abolished in 2018 after a 2017 report of the Low Pay Commission. I presume ISME argued against the abolition of those trainee rates, but they are gone now and this is not a substitute for that. This is purely based on age. This is not about experience. Does Mr. McDonnell accept that?

Mr. Neil McDonnell:

Yes, but the law provides for differential rates of pay, for example, for apprentices, so there is an inherent recognition of this. I am not going to comment on the Deputy's interpersonal or social skills were he to find himself in a filling station after the next election. What I could say, however, is that it is likely that an employer would have to supervise him less than a 16-,17- or 18-year old. That is all.

Paul Murphy (Dublin South West, RISE)
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Mr. McDonnell might be disappointed. I might incur a lot of supervision. I want to go back to Dr. Redmond to explore what I believe is a important issue, namely, the EU directive on adequate minimum wages. I do not know to what degree he is qualified to speak about it, but it changes the whole pitch in terms of this issue. While it is legal to have different minimum wage rates, they have to be objectively justified and in pursuit of a legitimate aim. On one of the many arguments being advanced, namely, the impact of the cost on businesses, this was explicitly looked at by the Low Pay Commission which received legal advice on it and said this would not appear to be a legitimate aim and that it would not stand up in the context of when this directive is transposed. Will Mr. Redmond speak a little on that?

Dr. Paul Redmond:

With regard to the EU directive, there is no getting around the fact that Ireland is obliged to transpose that into law this year. The directive is not prescriptive. It does not exactly say this is what the minimum wage should be, but it sets a framework for establishing minimum wage adequacy that is consistent across Europe. In doing so, it provides guidelines that would say that a minimum wage needs to be set on grounds that can be justified as fair.

Generally speaking, what we are talking about is the minimum wage being set as a percentage of, say, the median or average wage. The common standard or benchmark for setting it would be at 60% of median wage. That is expressly stated in the EU directive but it falls short of saying this needs to be done.

The other thing in the EU directive that is relevant to today's discussion is that, again, while not saying that sub-minimum youth rates should be outlawed, it certainly cautions against their use. When this is looked at in light of the recent findings from the European Social Charter, there is no getting around the fact that Ireland is now obliged to deal with these issues. In dealing with them, it seems that sub-minimum wage policy needs to be reformed. In that regard, the recent recommendations from the Low Pay Commission are consistent with those directives and guidelines.

It is also worth noting that this is not unique to Ireland. This is affecting all EU countries. Other EU countries are in the same boat and are making similar arrangements to Ireland to try to benchmark the minimum wage in a clear and transparent way. This is happening across Europe.

Matt Shanahan (Waterford, Independent)
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Before I ask my questions, I note there has been some dissing going on here between the private sector representatives and unions. On the issue of collective bargaining, which I have raised many times, ISME should be on the Labour Employer Economic Forum, LEEF, so that the voice of small business is heard. It was not heard in the last round - quite dramatically - in the context of the steep increase in the minimum wage, which is why the Government is now providing supports to employers. We do not need to get into union bashing or talking about employers and how they treat unions. We are talking about a much different thing.

To get back to the ESRI, with respect to its analysis of the sub-minimum wage, how many of those employees are in full-time permanent employment?

Dr. Paul Redmond:

A minority would be in full-time employment. I cannot provide an exact figure, but when we talk about minimum wage workers in general, they tend to be part-time workers.

Matt Shanahan (Waterford, Independent)
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Based on the analysis, what is roughly the deferred cost involved? If those people were on the national minimum wage as opposed to the sub-minimum wage, what would the annual difference in the threshold work out at?

Dr. Paul Redmond:

I could not say.

Matt Shanahan (Waterford, Independent)
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I would not say it is a big figure given that it relates to 15,000 people and they are all on different gradations. We are talking about a one-size-fits-all approach and the economy and the sectors of the economy are not like that. I referred to what was said by the parties present, that we have the second highest minimum wage in Europe. We are talking about the competitiveness and survival of small business, which never really come up in discussions about wages. We all understand we need an acceptable living wage-----

Dr. Paul Redmond:

I will address that for Deputy Shanahan, as I know he was not in the room when I addressed it previously. It is not correct to say that our minimum wage is somehow disproportionately high in European standards because the Deputy is talking about nominal terms. Realistically, we must take into account cost of living and purchasing power. When we do that and compare our minimum wage in terms of what we can call minimum wage generosity, we fall quite far down. We are the seventh highest in Europe. I reiterate that one of the reasons we are talking about sub-minimum wages is that objectively, by internationally recognised standards, they are low and we have been singled out in Europe as having sub-minimum wages that are too low. We were the only people singled out in 2023 in the European Social Charter in that regard.

Mr. Greg Caffrey:

If I may respond to the Deputy's comments-----

Matt Shanahan (Waterford, Independent)
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My time is running out so if Mr. Caffrey does not mind, I-----

Mr. Greg Caffrey:

Union busting and the discussion around that is very relevant because it is prevalent across industry in Ireland, particularly with groups like ISME, which does not engage with collective bargaining for workers.

Matt Shanahan (Waterford, Independent)
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Sorry, Mr. Caffrey, but this is a completely different discussion and one for another day.

Mr. Greg Caffrey:

I am just responding to the remarks the Deputy made. It is very relative. The irony is that ISME's members, by majority, do not engage in collective bargaining but, in the same breath, it is being advocated that they are included in high-level collective bargaining arrangements.

Matt Shanahan (Waterford, Independent)
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The point I made was in relation to the State's mechanism for protective bargaining.

Mr. Greg Caffrey:

I understand why Deputy Shanahan is making those representations but there is a contradiction there.

Maurice Quinlivan (Limerick City, Sinn Fein)
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I am cutting off this exchange. Mr. McDonnell also wishes to speak.

Mr. Neil McDonnell:

I want to address the issue of advocacy because, to be fair, no one here has a dog in the fight. It is defined by EU law as 50% of mean or 60% of median, whichever is higher. We recognise that issue. Our difficulty with the Brussels position on this is that the European definition does not take account of the structure of the Irish economy. By that I mean that 49% of Irish workers are employed either by a multinational or by the State, and the wage differential is substantial. In the UK, the private sector average pay is now ahead of the public sector, which would be expected at the top of the wage cycle. Here, it is 10% lower on average. The particular issue is that the average weekly wage in the public sector here is €1,114 and in an SME it is €759. The average industrial wage across the board is €769 because effectively half the workforce is working for a multinational or the State. It is very easy to say we are in trouble with Europe because of adequacy. The small business cannot compete. That is what we mean by the crowding effect in the economy. We are not able to compete with the foreign multinationals and the State on wages.

Matt Shanahan (Waterford, Independent)
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I accept the clarification from the ESRI. My concern at the end of the day relates to the small business sector and the competitiveness and viability of business. I know many people in established businesses who are on the margins and close to going under. Every time there is another edict from the Government making another change that increases the cost base again, it pushes many businesses into liquidation. Despite the Government talking about new businesses being registered and all of that, I can guarantee that if we were to look at the value of new businesses registered in the past two or three years, the amount of employment they generate and the amount of money they are making, we would be amazed at how poorly they are performing. That is just a fact of life. My sense of it is that if we are to find a way to bring this grading up to the minimum wage, it will have to be done through some mechanism, be it a further apprenticeship support from the Government or something else. It cannot fall back on the small business sector.

To get back to the substantive point, we need everybody around the table talking and we need everybody's point of view. What we need in terms of collective bargaining is to hear everybody's point of view, while understanding that there are businesses that cannot take the increasing trajectory of costs in the economy.

Ms Jean McCabe:

To reiterate Deputy Shanahan's points, the PwC report on business restructuring, which has just been published, shows a 25% increase in insolvencies in the first half of this year, the majority of which were in hospitality, retail and construction. It is no coincidence that those three sectors are the same sectors outlined in the economic impact assessment report from the Department as being the most vulnerable to the increases in the minimum wage. It is important, when considering the sub-minimum rate, that we do not do so in a silo. We must take into account the impact it is going have on retail, hospitality and construction, the three most vulnerable sectors that all the data shows are impacted by this. I am a small business owner and I do not think anyone on the Low Pay Commission has ever managed a profit and loss statement, P&L. It is a fundamental flaw that there is no representation from hospitality and retail, the largest minimum wage employers in the country, on the commission. It is crucial that the right people are at the table and that this conversation includes people on the ground who know what the reality is like.

Mr. Greg Caffrey:

There is an acknowledgement that some businesses are under pressure and are struggling to survive. However, there are supports for those businesses from the Government. Just this morning, a new group was announced which will cater for collating 180 different supports for businesses in this country. There is also a provision in the legislation allowing small businesses that are under pressure to apply for a deferment, but they must justify and substantiate that claim. That provision is there for them.

It is there for them to use.

Ms Jean McCabe:

Someone might say that if they have never managed a business, but in reality, none of that is fit for purpose. No business owner wants to operate a business on the pretence that they are going to get supports from the Government. That is not how you manage a business.

Mr. Greg Caffrey:

Those are the provisions, however, within the legislation that are provided for business owners to use or not.

David Stanton (Cork East, Fine Gael)
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Mr. McDonnell mentioned students and seasonal work. Does ISME have any quantification of how many of the 15,000 we spoke about earlier are students who come in during the summer time and so on?

Mr. Neil McDonnell:

Again, we do not survey businesses for a breakdown of their workforce but a substantial cohort of the type of sub-minimum rate of labour we are talking about enter the workforce for a window in July and August and will exit it in September, whether they go back to college or school. They effectively backfill the adult labour that will go on holidays over the next eight or nine weeks.

David Stanton (Cork East, Fine Gael)
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Is that in line with the ESRI's figures of 80% comprising students?

Dr. Paul Redmond:

Yes, I was just going to come in with that. We estimate that 80% of people on sub-minimum youth rates are students.

David Stanton (Cork East, Fine Gael)
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Will Dr. Redmond comment on the seasonality of that?

Dr. Paul Redmond:

I do not know about the seasonality, although I am sure it is likely to be seasonal. We looked at the picture over the course of a year and 80% were students.

David Stanton (Cork East, Fine Gael)
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Of the 15,000, therefore, roughly 12,000 are students.

Dr. Paul Redmond:

Yes, exactly.

David Stanton (Cork East, Fine Gael)
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Of the 80% who also work in accommodation or retail, is that about the same number?

Dr. Paul Redmond:

We did not look at that specifically. We looked at it overall and it was 80%. We did not look at it sector by sector.

David Stanton (Cork East, Fine Gael)
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About half of them are women. Is that correct?

Dr. Paul Redmond:

Yes, 55% are women.

David Stanton (Cork East, Fine Gael)
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The figure, therefore, is about 7,000.

Dr. Paul Redmond:

Yes.

David Stanton (Cork East, Fine Gael)
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On the issue of productivity, Mr. McDonnell might take this question. If two people, regardless of their age, are performing the same job with the same productivity and output, should they be paid the same wage?

Mr. Neil McDonnell:

Objectively speaking, yes, but how are we to measure that productivity? As we have heard multiple times from the ESRI, the majority of youth workers are not on those sub-minimum rates of pay. All we are looking for is the freedom and legal permission to do this with those young workers who do not exhibit that. I have experience of young workers in workplaces who have said they will not work for sub-minimum rates, and not only are they not getting the minimum wage but they are getting €1.50 or €2 above it. We are not arguing in the real world in a lot of what we are saying here.

David Stanton (Cork East, Fine Gael)
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The point remains, however, that if two people in the same job with the same productivity do not require different levels of supervision and so on, they should be paid the same rate.

Mr. Neil McDonnell:

We have no issue with that. It is about how we establish that in the real world without someone with a clipboard and a ruler standing beside them.

Maurice Quinlivan (Limerick City, Sinn Fein)
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I thank the representatives for assisting the committee in its consideration of this important issue. I propose we move to private session to consider our other business. Is that agreed? Agreed.